Net Neutrality Effects: The Impact on You and Your Business

What is Net Neutrality?

Net Neutrality is a phrase that’s being posted all around the Internet lately and for a good reason. Net Neutrality is an ideology that believes the Internet should be free and open. The Internet has become so ingrained in our society and life that Internet access should be totally unrestricted so the flow of your Internet traffic cannot be handled differently because of what you’re trying to access. Back in 2015, the FCC passed an order that did exactly that. The order reclassified broadband providers as common carriers. The document is long but this section highlights the reason Net Neutrality was considered:

“79. In the 2014 Open Internet NPRM, we sought to update the record with information about new and continuing incentives for broadband providers to limit Internet openness. As explained in detail in the Open Internet Order, broadband providers not only have the incentive and ability to limit openness, but they had done so in the past.123 The D.C. Circuit found that the Commission “adequately supported and explained” that, absent open Internet rules, “broadband providers represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.”124 The record generated in this proceeding convinces us that the Commission’s conclusion in the Open Internet Order—that providers of broadband have a variety of strong incentives to limit Internet openness—remains valid today. “

Limiting Open Internet

The incentives to limit access to an open Internet are more valid today than ever, as cable companies are steadily losing subscribers every year, the so called “cable cutters” are not giving up their media entirely. Many are simply switching to online paid subscription services such as Netflix and Hulu. This becomes the crux of the issue and, in my belief, the reason Ajit Pai, former Verizon lawyer and current chairman of the FCC, wants to revisit the issue.

Repealing Net Neutrality will enable Internet Service Providers (ISPs) to make a two-fold attack on your wallet. Part one, bandwidth caps are already being done in many places. Part two is zero-rating. ISPs will implement bandwidth caps to force you to ration your internet usage (or pay them more) but will provide free (zero-rated) bandwidth to certain services so that you won’t reach your data cap or allow you to pay an additional small fee for unrestricted access to certain services. Verizon is already trying a variation of this out with its mobile network, Pop Data. This offers unlimited network access that doesn’t count against your monthly bandwidth cap purchased in intervals of 30/60 minutes.

4K and HDR Becoming Mainstream

The repeal of Net Neutrality will become a more serious issue for consumers sooner than later as we are on the advent of 4K and HDR becoming mainstream. This means if you want to truly utilize the new TV you bought with Netflix or some other streaming services, you will be more aggressively approaching your bandwidth caps, which will inevitably end with you either purchasing zero-rated data or paying a sweet overage. Who doesn’t love those overage fees?

The narrative put forth by Ajit Pai is that prior to Net Neutrality the Internet flourished, birthing companies like Facebook, Google and Amazon (all of which are in favor of Net Neutrality by the way). Net Neutrality is just a heavy handed government regulation that stifles innovation. Under the new Net Neutrality rules, Pai imagines a healthcare startup that could pay to prioritize network traffic for their customers being monitored remotely. However, as the interviewer points out, if money can be paid to prioritize traffic, the battle will always be won by the person with the most money to spend.

Ignoring whether or not being able to pay to prioritize traffic to one service or another is anti-competitive. It gives the ISPs the ability to control the flow of traffic. Best case scenario for the consumer, this will create an entirely new market for them where they can negotiate behind the scenes with companies to provide preferential treatment to a particular company’s traffic. Where will the next Netflix or Facebook competitor come from if they can’t afford to keep up with their deep wallets? Ajit Pai argues that is a problem for the Federal Trade Commission (FTC) to handle.

Risks and Benefits of Net Neutrality

The risks associated with repealing Net Neutrality, in my mind, far outweigh the benefits. The potential issues it brings to the table could be more stifling to innovation with tech startups that don’t have millions of dollars to throw around than any billing innovations the cable companies have in mind for if/when it is repealed. There are countless ways this could have ripple effects across the industry, however, I will leave more detailed deep dives to people more qualified.

If you want Net Neutrality to stay, visit Battle for the Net website to contact your congressman and make your voice heard. If you want Net Neutrality gone, I also suggest you contact your congressman and express your views.